Q1- The annual accounting concept is a key Federal income tax concept. Please explain the annual accounting concept and discuss two (2) areas in which tax law departs from strict adherence to the annual accounting concept. Include supporting citations as you write your response. Q2- On 3/1/X1, Greg (a calendar year taxpayer) decides to sell manufacturing equipment the he held for use in business in an installment sale. Greg purchased the equipment years ago for $100,000. His adjusted basis in the equipment is $72,000. Greg agrees to sell the property for four equal payments of $32,000 – one upfront payment and the other three payments to be received on 12/31/X1, 12/31/X2 and 12/31/X3. Required: Answer the questions, below. Provide computations with labels. If all you provide is an answer, and it is incorrect, no points can be awarded. a) What amount of gain is realized on the sale in X1? b) What amount of gain is recognized in X1? c) What is Greg’s basis in the note receivable at the end of X2 (not a typo, X2)?